What does the budget mean for the NHS?

Three points.

First, as the Chancellor made clear, this is an interim budget. If there is no deal on Brexit, all fiscal bets are off. That’s unlikely to mean any change for the NHS budget but it is likely to see some changes in taxation for the country as a whole.

Second, (see my post yesterday) despite his grumpiness in having the NHS spending announcement taken from him by the Prime Minister – and having to find the money for that – the Chancellor did not link that extra money with extra taxes. Within the politics of the Government this is very understandable since they cannot depend upon their backbenchers to vote through new taxes.

However, within the wider politics of public expenditure, this is a pity. The public have consistently said that they are prepared to pay more taxes for the NHS so, if at some stage the Chancellor is going to need new higher taxes, linking them to a rise in NHS funding would have been a good idea given this public agreement. But that didn’t happen yesterday because too many government MPs have made it clear that the extra NHS money must not come from tax rises.

So, the important results for the NHS are that – no deal notwithstanding – the money is now in the bag and the delivery of better outcomes that flows from that can now be organised and published in late November or December.

The third point concerns the fact that the budget did not, in any real sense, ‘end austerity’. Cuts in public expenditure have had a very direct impact on NHS services. In the next month there will be a Green Paper on social care – where direct cuts in local government expenditure have had an impact on the NHS for the last 8 years. I will post about this in a couple of weeks.

But ongoing cuts in local government have had a direct impact on demand for NHS services. In general social determinants of health have worsened for poorer people and this has had a very direct impact on the most deprived who depend upon local government services. It is therefore not surprising that they have increased demand on NHS services.

Last week’s research “A Quiet Crisis”, funded by the Lloyds Bank foundation and published by the New Policy Institute, investigated how English local authorities are supporting people facing disadvantage. It explored how English local authorities have fared during sustained period of severe financial pressure on local government finances and whether this experience differs across the country.

There are four key findings,

  1. Spending by local councils in England on services for adults and children facing disadvantage has fallen by 2% over the five years since 2011/12, compared with an 8% fall for local government as a whole. However, rising demand means the impact of these cuts on people accessing services is greater than the average fall in spending
  2. There is a great variation in spending across different categories of disadvantage with a 5% RISE in child social care, a 2% fall in social care for working age adults and a 13% fall in housing services
  3. To manage, councils have had to shift away from preventive spending toward crisis spending. For example, there has been a 46% reduction in spending on preventing homelessness, while spending on homelessness support has increased by 58%, primarily through the cost of providing temporary accommodation.
  4. Almost all (97%) of the reduction in spending has occurred in the most deprived fifth of local areas. Metropolitan and other urban areas concentrated in the North and the Midlands, as well as coastal districts across England, are over represented in this group, yet these areas have the higher numbers of people facing disadvantage and in need of support.

Let’s just unpick that for a moment.

If you are in the top 80% of local authorities in terms of the wealth of their populations, then you have suffered 3% of all of the reduction of local authority spending on people facing disadvantage.

If you are in the bottom 20% of all local authorities in terms of the wealth of their population then you have suffered 97% of all of the reduction of local authority spending on people facing disadvantage.

If you are providing health services in the local authorities in this bottom 20% (in terms of deprivation) poorer people in your areas will have suffered much greater cuts in local authority services aimed at them.

It will not surprise NHS providers in those areas, since the demand for healthcare from those facing disadvantage (in areas of great disadvantage) will have increased.

Austerity has never been spread equally across the country. The resulting trauma for poorer people in poorer areas will lead them to need more health services.

Ending austerity for these poorer people in poorer areas will improve their health and lessen their demand for health care.